If there is so much unsatisfied demand for more transit capacity, why don the transmission system operators just build it?
The Preliminary Report has used information on access ‘refusals’ to assess the level of unsatisfied demand. The term refusal refers to a request to purchase transit capacity that is refused on the basis that all the capacity was already sold. However, it should be noted that these requests would not necessarily lead to a firm bid by the requesting shipper for the capacity. In such a case, the refusing transmission system operator would not necessarily consider that it had received a sufficiently strong signal of interest for it to build new capacity. However, one would expect an efficient transmission system operator to be constantly looking for business opportunities and therefore for it to have in place mechanisms for channelling the interest of shippers into a more formal process, such as a regular rolling open season, where firm bids for extra capacity can be made. It is not clear, however, that the existence of such mechanisms is wide-spread.
